Re: Implementation of Pay for Performance/Tribus

From: John Conover <>
Subject: Re: Implementation of Pay for Performance/Tribus
Date: Tue, 27 Aug 1996 04:59:30 -0700

John Conover writes:
> Myron. Tribus writes:
> Hi Myron. Many years ago, there was a formal study initiated at
> Westinghouse, as I remember it, (or perhaps it was ATT or GE,) where
> productivity vs. incentive was analyzed in a telecommunications
> equipment manufacturing line. The manufacturing line was divided into
> two sections-a variable and a control group. The idea was that the
> variable group was to receive additional incentives, and the effects
> of the incentives on enhanced productivity were evaluated. The
> variable group was given cash rewards for "quality," numerical
> outputs, etc., and, as expected, productivity increased. They were
> given an assortment of other incentives, and, likewise, productivity
> increased. All was fine until someone noticed that the productivity of
> the control group, also, was increasing. To evaluate the enigmatic
> nature of the results of the study, all of the incentives of the
> variable group were removed. The productivity of both groups
> increased, yet again! The study is often cited by Lester Thurow(sp) of
> MIT, arguing that managers should consider incentives as only one tool
> in the managerial "toolbox," that is to be used in conjunction with
> all of the other tools. FWIW.

Opps! Let me correct myself. It was the Hawthorne experiments, (The
"Hawthorne Effect,") and it was not Westinghouse, as I had posted, but
Western Electric where the study occurred. Apologies for wasting the
bandwidth ...



John Conover,,

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